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Resin Systems Inc - Business Update

04 October 2000

Resin Systems Inc., a chemical technology company, announced that it has secured commitments for production trials with nine U.S. based composite materials manufacturers. These commitments were the direct result of management's attendance at the Composite Fabricators Association 2000 trade show last week, in Las Vegas. In addition, RSI has a prospect list of approximately a dozen additional companies for production trials. The trade show is the largest of its kind in North America and was attended by the majority of the composite fabricators industry. The show was used by RSI to announce the launch and commercialization of its "Version" resin for the composites market. The trade show also provided management with the opportunity to meet with two large chemical companies, which led to very preliminary discussions on strategic alliance possibilities. John McCrae, RSI's President and CEO, believes RSI will be extremely busy from mid-October until Christmas with production trials, which are slated to start the middle of this month. This is a critical step to ultimately securing contracts for Version as all composite manufacturers will first test the resin in their existing production process. The Company's target is to secure a series of orders before the end of this year. One issue, which arose during the show, was apprehension on the part of some fabricators to accept that RSI has developed a production-ready urethane-based resin, which addresses a myriad of industry needs. In spite of the fact that the Alberta Research Council has twice, independently verified the superior characteristics (strength, impact resistance, flexibility, etc.) of Version as compared to polyesters (fiberglass) and epoxy resins, a segment of the industry has taken a "show me" attitude, which is not unexpected. RSI management attributes this skepticism to previous attempts by others in the industry to provide a 'pultrudable' urethane resin. Beta tests conducted at various facilities during the summer proved that the RSI resin "cured" at a rapid rate compared to other resins. This "curing factor" means manufacturers can increase the speed of their production lines by two to three times. In addition, switching to Version requires only modest capital expenditures.